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Government home buying schemes in 2021

There are a number of government home buying schemes available to help you get on the property ladder including Help to Buy, Shared Ownership and First Homes. The eligibility criteria has changed for some of the older programmes. See which schemes you could be eligible for in 2021.

Government schemes to help you buy a home

For some people, saving a deposit, securing a mortgage or finding the right home at the right price is such a struggle that they are priced out of buying on the open market. If you’re in this situation, it is worth looking into the Government home buying schemes on offer to help you get on the property ladder.

Help to Buy: Mortgage Guarantee scheme

The government launched the new Mortgage Guarantee in the budget 2021 aimed to help buyers with a 5% deposit.

What you should know about the Mortgage Guarantee scheme:

  • The Mortgage Guarantee scheme allows you to get a mortgage with just a 5% deposit
  • The government has promised to underwrite 15% of the mortgage in the event that you default. As a result, mortgage lenders feel confident enough to offer you a 95% mortgage
  • The scheme applies to all types of properties (new build and old) that cost less than £600,000
  • First time buyers AND existing homeowners can apply
  • You must have a regular income and a good credit rating.

Find out how the mortgage guarantee will work and how to apply.

Help to Buy: Equity Loan (2021 – 2023)

Through a Help to Buy equity loan, the government will lend you up to 20% of the value of a newly built home in the form of an equity loan – or 40% if you’re in London. You’ll have to find a 5% deposit and secure a mortgage to cover the remaining share of the property.

What you should know about Help to Buy:

  • Unlike its predecessor, it’s only open for first-time buyers and there are regional price caps ranging from £186,100 in the North East to £600,000 in London
  • There’s no salary cap or joint income limit applied, but an eligibility calculator will check monthly income and outgoings to ensure you can afford the mortgage repayments
  • You must buy your home from a housebuilder registered for the scheme

Find out more about the Help to Buy Equity Loan

First Homes

The First Homes scheme, launched in June 2021, gives first-time buyers the opportunity to buy their home at a 30% discount.

What you should know about First Homes:

  • It’s only available to first time buyers in England buying a new property.
  • Purchasers must also have a household income of less than £80,000 (or £90,000 in London).
  • The scheme is designed to help people get on the housing ladder in their local area. This means that the eligibility criteria is set by the local authority and may differ. For example priority may be given to local key workers.
  • There are only a handful of developments that offer First Homes. However, more sites are due to launch across the country with a further 1500 homes for sale by the end of 2021.

Find out where in England you can find First Homes and everything else you need to know in our guide on First Homes.

Get free advice from L&C mortgage brokers to find out what government scheme might be best for you

Help to Build

This scheme is to help self and custom builders get onto the housing ladder through lower deposit mortgages.  When the build has been completed, a government backed loan is made available, similar to the Help to Buy: Equity Loan scheme. Find out more about the  Help to Build Scheme and how to apply.

Shared Ownership (New Build)

This shared ownership scheme allows you to buy part of a new build property and rent the other part. Over time you can buy more of the property, until you own the whole thing.

Find out more about new build shared ownership

Shared Ownership (Resale)

The shared ownership resale scheme allows you to take over an existing shared ownership property that the current owner has put on the market. Over time you can buy more of the property until you own the whole thing.

Learn more about shared ownership resale

Lifetime ISA

A Lifetime ISA, or LISA, is a type of account designed to encourage people to save for their first home or their retirement.  You can save up to £4,000 a year and the government will top this up with a 25% bonus.

Find out more about the Lifetime ISA and whether you should open up an account.

Rent to Buy

You can rent a newly built home with the intention to buy, thanks to this government scheme.

See if Rent to Buy is the right scheme for you

Right to Buy

If you live in a council house or flat you may be able to buy your home at a discount under the right to buy scheme. The discount depends on where you live, how long you have lived there and whether you live in a house or flat.

Read more about right to buy

Armed Forces Home Ownership Scheme

The Armed Forces Home Ownership pilot scheme (AFHOS) has now closed, and the government recommends considering other schemes outlined above – such as Help to Buy.

HOLD or Home Ownership for people with Long term Disabilities

HOLD is a specially tailored option to assist people with long term disabilities to purchase a home on a shared ownership basis.

Find out more about HOLD

Schemes in Wales and Scotland

There are similar schemes open in Wales, Scotland and Northern Ireland.


Leave a comment (17)* Required

  1. JulianaJuliana

    Am38yrs and a single mother of one and also work part time as a support worker and also on benefit . please am i eligible to apply for the help to buy scheme.

  2. SalomieSalomie

    I am a21 yr old work as a support worker would love to Owen a 2 bedroom house how much do l need to save for deposit roughly

  3. Angela CampbellAngela Campbell

    A really great new governments scheme.

    Thanks

  4. James JenningsJames Jennings

    My wife and I have had a buy to let property for last 15 years with the same good tenants who now wish to leave, my daughter (a healthcare assistant in the Royal Hospital, Liverpool) and two grand children would like to take over tenacity ie pay the mortgage, but can’t by law as they are related, she can’t get a mortgage because she doesn’t earn enough, but could afford to pay interest only mortgage of £320. As anybody any advice, no joy with mortgage advisers.

  5. Paul johnsonPaul johnson

    I meant is there any cash incentives

  6. Paul johnsonPaul johnson

    Me and sister live in a council house, is there any incentives if you want to buy a house and leave your council house?

  7. Dimitris LaliotisDimitris Laliotis

    I would love to buy a house in Mossley north England ,I am a father of 2 boys .Me and my wife working ,Imogen 40years old and me 46 our boys 12 and 14 .Our income is about 36 000.

  8. Mary F AlukoMary F Aluko

    I will like to find out if I could get any assistance on rent to buy scheme. Working 35hrs weekly , wages between £1000_1200 monthly. I live in Birmingham I paid rent now monthly £600. Looking forward to your reply.

    • HomeOwners AllianceHomeOwners Alliance

      Hello Mary. Check whether you qualify with your local Help to Buy agent. If you live in London, you will need to contact the Mayor of London’s first steps to home ownership website Homes for Londoners.

  9. Paul JohnsonPaul Johnson

    Any ideas we are hoping to buy a small 2 bed house with my savings , and giving our council house back which we could have bought ,is there any financial help towards the house ?

  10. Richard huntRichard hunt

    If I am working in another country can I apply for a Morgage rent to buy with the government is that possible any information you have will be greatly appreciated kind regards

  11. monika hoxhamonika hoxha

    i am looking for a home ,i am a first time buyers.where can i apply.thank you so much

  12. BrittanyBrittany

    Thanks a lot for this article! You always provide us with very useful information. We used Help to Buy scheme with my husband as we were first-time buyers. It’s really helpful. This government scheme means you can move into your new home with a deposit as low as 5%. There are some criteria people need to consider before applying but I think everyone who applies is al least 18 years old) If you don’t already own a home you can apply to this program. You should always show that you are not in mortgage or rent arrears as it is not acceptable. Applicants need to have good credit history to demonstrate that they can afford regular payments.

  13. Annette sinclairAnnette sinclair

    My husband and I own our 3 bed semi out right, but we both have disabilities and would like to move to a bungalow , is there any help for us , possibly our house would fetch approx 135000 most bungalows we like or would benefit us cost anything from 150000. – 160000 .

  14. Andrew GrayAndrew Gray

    Hi. We are wanting to buy on the rent to buy scheme but aren’t sure where to go or what the requirements are. Please can you advise us where to go & what to do.
    Yours truly,
    Andrew Gray.

 
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